Non-price determinants of supply and demand:
A change in any of the non-price determinants of demand will cause the demand curve to shift either left or right. A change in any of the non-price determinants of supply will cause the supply curve to shift either left or right. If the demand curve shifts to the right, then the equilibrium quantity and price will increase. The producers will supply more and will charge higher prices due to increased demand for their good/service. If the supply curve shifts to the right, then the equilibrium quantity will increase whilst the equilibrium price will decrease. With an increase in supply producers are able to supply more. The price will decrease because the good/service is now more abundant. These non-price determinants of supply and demand can affect supply and demand for goods and services, and thus can cause changes in the exchange rate because countries supply and demand goods/services from one another.
- These are the following non-price determinants of demand: branding, market size, demographics, seasonality, available income, complementary goods, and future expectations.
- These are the following non-price determinants of supply: costs of production, productivity, government intervention in the form of taxes and subsidies, price of related goods, and supply side shocks.
A change in any of the non-price determinants of demand will cause the demand curve to shift either left or right. A change in any of the non-price determinants of supply will cause the supply curve to shift either left or right. If the demand curve shifts to the right, then the equilibrium quantity and price will increase. The producers will supply more and will charge higher prices due to increased demand for their good/service. If the supply curve shifts to the right, then the equilibrium quantity will increase whilst the equilibrium price will decrease. With an increase in supply producers are able to supply more. The price will decrease because the good/service is now more abundant. These non-price determinants of supply and demand can affect supply and demand for goods and services, and thus can cause changes in the exchange rate because countries supply and demand goods/services from one another.
